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28th May 2016

Brussels keen to redirect €82bn for jobs and growth

  • Springs buds: talk in Brussels is switching emphasis from austerity to growth (Photo: mcarruth)

The EU commission wants to redirect €82bn worth of structural funds to projects aimed at boosting employment and growth, particularly in bailed-out countries, measures seen as both vague and inadequate by critics.

Anticipating a demand from Monday's EU summit to redeploy as yet unspent structural funds for employment-related projects, the EU commission on Friday (27 January) announced its intention to work with member states on redistributing €82 billion.

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Speaking at a press conference with the Belgian premier, commission chief Jose Manuel Barroso said: "What we can do is to redeploy structural funds, as long as member states agree, because this is always a partnership between the commission and member states."

He gave the example of Italy, whose recently appointed technocrat government asked for a "reprogramming" of funds to the tune of €3.1bn for education, broadband and railway investments in the country's poorer southern regions.

"Now we would like to do the same with programme countries where there is high youth unemployment," Barroso said.

A similar programme has been agreed with Greece as well, where projects worth €11.5bn should help build motorways, schools and energy efficiency in housing, commission spokesman Ton Van Lierop told this website. The task force of EU commission experts deployed to the country last year with the aim of assisting the government with its structural reforms required by the EU and IMF will "help" in implementing these new priorities, he added.

In Romania and Bulgaria, the EU's newest members and where structural funds go largely unspent year by year, the governments have accepted to have EU experts help them with the drafting and checking of the EU's notoriously bureaucratic project requirements.

But experts are sceptical that this new strategy will have any impact on the forecast recession in most member states.

"It's not enough money to really make a difference. If it was €82bn for research or in fiscal deductions for small and medium enterprises, maybe it would," says Diego Valiante, an economist with the Centre for European Policy Studies, a Brussels-based think tank.

Instead of doing more of the same - letting member states select all sorts of "bridges to nowhere" and other irrelevant projects, the EU commission should link structural funds with labour market reforms needed in most member states, he said.

But Valiante also conceded that under the current budget - which ends in 2013 - there is little room for manoeuvre for both the commission and member states. "This one is finished, we will have to wait for the next multi-annual budget to revamp the rules," he said.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

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